For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!
Joined: Aug 10, 2004 Posts: 1104 Location: San Diego, CA, USA
Posted: Tue Aug 17, 2004 5:16 pm Post subject:
Permanently_Baffled wrote:
Hold on a minute how can consumption exceed production trespam?
Consider it this way. Suppose today the physical peak right now is around 85 m b/d. Remember that the peak is a physical/economic phenomena. Say you're peaking at 85, you might be able to throw a heck of a lot of investment to pull it to 85.5. But it makes no economic sense to pull out an additional .5 (because of diminishing returns).
So the world is pumping 80 and maybe using 79. Now the world needs 81 but we're only pumping 80. We can't invest quick enough to pull up to 81 (when we're assuming that 85 is possible) and therefore the economy recesses as prices are bid up. Consumption drops to 60 m b/d because the recession is hard and deep because of the high debt in the US and unstable growth in places like China. Now we consume at that rate (60) for many years. Consumption is now way below production capacity. We continue on for a while, maybe a few years, pulling oil out, easier oil.
Now the physical peak is shifting down as we pump. 85, 80, 75, 70. Consumption is increasing. Finally dropping production hits rising consumption. Maybe at 70. We're not pumping at that rate, so we don't know that the physical peak is. But low and behold, we can't pump above 70 without heavy investment.
I guess the point I'm making is that we may be 5 million barrels a day below physical peak. But we can't invest in Iraq to pull the production up to peak value. So the economy recesses and Saudi Arabia goes into decline. Now when Iraq stabilizes (will it ever stabilize), the production is increased. But the rest of the world is much further into decline.
Or think of it this way. Suppose 100 years ago we have the technology we have today. We could explore the entire world for oil, drill, and,on the same day, turn on capacity all around the globe simultaneously. The production at that time would have huge. We could have just dumped the oil onto the ground and pumped as hard and fast as possible. What could we have done? 200 m b/d? Who knows. It would have been huge. Over time that max decreases.
So all I'm saying, as a previous poster has, is that one may never actually hit peak. The economic disolation as one approaches peak is enough to depress the economy so production drops.
After thinking about even more, I have come to the realization that since oil is such a vital energy requisite for the world, there is far less demand elasticity as we might believe (sheesh, I sound like an economist, help me now!).
In order for us to grow, we need oil. We will try to pay any price. Our thirst will not be slaked for long. We've hit the ceiling, though, it seems. All we are really doing is just treading water, riding the plateau for as long as we can. The incremental increase in production is neglible (I've read we are producing around 83million b/p/d now (remember OPEC's numbers have been estimated to be off by 7.5% on purpose). That number is slightly above most peak-oil analyses I've seen of maximum production around 79-82million b/p/d.
So if "peak" comes at what, 85 million b/p/d, because we made a massive effort? Then what? How long can that be maintained??
As we all seem to know, that just means the cliff gets steeper. Mathematically, the sum total "under the curve" is the same, it's just the "shape" of the curve we are debating about! All the underlying nice, pretty bell curves get mashed, and pulled, and formed like silly putty into whatever peak we decide. Like the artificial peak of '79.
Imagine taking a hammer to our concept of the "peak" and flattening it out, and you get an idea of how the peak can be distorted, so it almost is a bit of a moot point. We "could" completely stop using oil tomorrow, and then "save" it all up for one big massive peak later, but who's going to do that?
I see a massive tug of war right now between the industry (OPEC, EIA, and politicos) trying to downplay any "fundamental" supply problems. See the fluff piece by Opec's president yesterday on oil.com's site for an example. He had the audacity to say the high price doesn't really reflect a problem in the fundamentals, nor in the supply/demand relationship! Now then, um, does that mean these higher prices resulted out of thin air? (maybe, if you consider that the market anticipates as much as possible, instead of reacts...)
Hmmm...I see my Master's thesis in Mathematics (a true measurement science as opposed to economics!) in this! Oh wait, won't have time....
Joined: Aug 10, 2004 Posts: 1104 Location: San Diego, CA, USA
Posted: Tue Aug 17, 2004 7:44 pm Post subject:
OilsNotWell wrote:
LONG POST ALERT
Hmmm...I see my Master's thesis in Mathematics (a true measurement science as opposed to economics!) in this! Oh wait, won't have time....
marek is also working on this in economics at Chicago. You will have to compete with him.
On your point of equal areas: I've been reading a few books that propose energy taxes, that consumption of energy should be taxed, not labor, as is currently the case. Then there would be an incentive to minimize use of energy and to increase the amount of labor, which would help with employment. Because that would be a regressive tax, raising the prices of goods derived from processes that use energy (meaning just about everything), the poor would be paying a higher percentage of their income in taxes. So everyone gets an energy credit. This would be similar to a minimum salarly below which one is not taxed.
To me it is a much more efficient way to truly tax something. It would recognize that energy sources (in particular fossil fuels) are a sort of common good and that is what should be taxed, so that all benefit from it and so it is preserved for future generations.
For those future "oil-age" historians, mark 2004 on your calendars.
That was when our industrial/economic growth was truly limited by the availability of cheap oil. Our assumption that whenever we needed oil, it was there, is now wrong. We are from here on out limited by our true ability to produce.
We will see an ever-increasing amount of attention being played to "securing our energy independence" (conveniently after the election) instead of addressing the real issue of resource depletion.
Can you see it on CNN? "War for Energy Independence" or "War on Oil Terrorism!" Next stops: Iran, Saudi Arabia, and Venezuela!
I've been reading a few books that propose energy taxes, that consumption of energy should be taxed, not labor, as is currently the case. Then there would be an incentive to minimize use of energy and to increase the amount of labor, which would help with employment. Because that would be a regressive tax, raising the prices of goods derived from processes that use energy (meaning just about everything), the poor would be paying a higher percentage of their income in taxes. So everyone gets an energy credit. This would be similar to a minimum salarly below which one is not taxed.
Interesting idea. Kind of like a national sales tax where those who buy things pay more tax. With your idea, those who use more of their energy credits, pay more tax? So if you eat a steak, that would be taxed more than a bowl of rice? And driving a car more than riding the bus?
I think you meant progressive, not regressive, though.
It's interesting, but it is so unlikley to happen based upon our cultural underpinnings, and would require us to completely face our problems. Humans don't generally do that. We're better at exploiting things.
I instead see a transition to the "energy slaves" idea. The poor(er), and that's what going to be most of us soon, will be required to produce a certain amount of "net energy" for the state(elite). Orwellian nightmare cometh. Even in our death, our bodies will be thrown into the furnace to create energy! Yes, that's how the energy credits will work.
My god, I've got a great book idea. Fiction, but who knows?
Joined: May 26, 2004 Posts: 1190 Location: Zoorope
Posted: Wed Aug 18, 2004 4:44 am Post subject:
Oilsnot well,
that's not fiction: in Europe we have sales tax! When you buy something, you pay about 20% tax over the stuff. It's included in the price, so you don't even see it (and easily forget). And yes, it's progressive: on food, as an example, you pay only 4%, and also on cultural products, like books. Gasoline is taxed 65%, that's why it's so expensive here!
As you can see, we don't have spare room for more taxes here... _________________ **no english mothertongue**
--------
Objects in the rear view mirror
are closer than they appear.
Posted: Wed Aug 25, 2004 11:04 am Post subject: "no room for more energy taxes in Europe"
With respect I'd differ with the premis of this view that energy taxes must perforce target the consumer, in the regressive and false assumption that "the polluter must pay." How many heroin addicts are freed by facing higher prices for their drug ?
What is needed, in my humble opinion, is
a/. massive investment in sustainable energies (such as methanol from medium cycle coppice woodland at around 800 Ts /sq ml /yr) (stuff the so-called "Renewables" such as Battery-Chicken-Dung Power: we can't afford their immorality or their impacts).
and therefore:
b/. the exponentially rising transfer of Research, Exploration and Development budgets by Fossil energy interests into the Sustainables' production and usage.
and therefore:
c/. a revenue-neutral tax on shareholder profits from energy production and usage corporations (e.g. Shell & Texaco, BMW and Ford) according to the ratio of their Fossil : Sustainable Budgets for Research, Exploration & Development.
The acronym would thus be a BRED Tax.
This could directly influence the shareholders who profit from present fossil fuel usage/depletion/pollution, and who have the only practical control over the corporations' strategic planning.
Far from being punitive towards them, a revenue neutral BRED Tax could help them (and the rest of society) avoid bankruptcy.
In this context, (and that of the topic "When will it hit) I'm puzzled by the painstaking effort ASPO invests in identifying theoretical oil-production decline-curves over many decades, without (as far as I've yet found) a parallel effort to identify the resulting highly potent iterative geo-economic stresses. After all, bankruptcy is normally a horribly sudden event.
The brittleness of our present industrialized societies was perhaps epitomized by the result of a single tree which, growing under 33%-raised airborne CO2, unexpectedly reached a significant power line and blacked out much of the east of the USA.
Since the global economy runs on intangible investor-confidence, and this is now stressed both by oil-depletion and by climate destabilization (whose present $100bn /yr damage costs are rising at around 10% per year, removing assets' insurability and so their collateral value), can we reasonably expect an orderly economic decline, or something more akin to a cliff ?
If the latter is the probability, I'd ask not "When will it hit" but which of the sustainable energy technologies will be best able to endure such a crash and assist with future development ?
The market's invisible hand will take care of this matter... Most of the industrialized countries are not willing to let some of their present healthy way of living.
It's gonna be a painful lesson, so get ready to party
Joined: Aug 14, 2004 Posts: 2063 Location: San Diego, Ca.
Posted: Mon Oct 11, 2004 3:57 pm Post subject:
I am going to revise my date from 2010 to 2006. I am going with ASPO's model. Next year should be interesting. _________________ "Peak oil isn't more than an interesting industry factoid and doesn't have anything to do with the hysterics speculated on ad nauseum around here!" ReserveGrowthRulz
but we might scrape through it if prices hold below around $70 and get a years 'grace'
there is new supply due next year after all
So the official year could be '06 but 'peak oil' for me is the day the world actually admits its got a problem
We are oil addicts!
I hope this is true anyway. I need another year to clear my debts!
Chris-h
Then the price of oil will tend to rise as demand tends to grow with flat production, or else the economy will decline to lower demand and close the gap.
Joined: May 31, 2004 Posts: 920 Location: Brno, Czech rep., EU
Posted: Wed Oct 13, 2004 7:33 am Post subject:
2004!!
It already happend, we are post peak, this is it, the apocalyptic world after peak!
Current conditions are post-peak conditions (demand higher than supply), and even if productions manages to raise next year, it won't catch demand, so situation is exactly same as on "downhill" part of the curve..
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